Jacksonville council rejects property tax hike

The Jacksonville City Council on Monday shot down a plan to raise property taxes, effectively extending the current tax rate into next year.

Facing a state-imposed deadline to set a proposed maximum property tax, the council rejected in a 6-12 vote a last-minute proposal from Councilman Richard Clark to raise taxes next year to help pay off the city’s looming pension debt.

While the decision set the tone for how the council will craft next year’s budget in the coming weeks, it could have also had implications for Mayor Alvin Brown’s proposed pension-reform legislation.

Under Brown’s proposed legislation, the city would annually contribute $40 million — in addition to the minimum payment required by state law — toward its $1.65 billion pension debt.

Clark envisioned using the added tax to exclusively cover that payment if the council approved Brown’s proposed legislation.

While Brown has said he doesn’t support any tax increase and has suggested JEA find the money to cover the $40 million payment, a pension-reform task force he created suggested funding the payment with a tax increase.

However, Clark couldn’t convince his colleagues to raise taxes for the second year in a row, following last year’s 14 percent increase.

“For a lot of people, it’s between buying groceries and buying medicine or not buying gas,” said Councilman Doyle Carter.

After voting down Clark’s proposal, Council voted 18-0 -- Councilwoman Denise Lee was absent -- to set the maximum tentative tax rate at 11.4419 mills. That equates to a roughly $1,144 property tax bill for the owner of a $150,000 home with a $50,000 homestead exemption.

Other council members said property owners alone shouldn’t carry the burden to pay off the pension debt and advocated for implementing a sales tax to cover the $40 million contribution.

Clark had responded that his proposal would not have precluded such a vote but simply provides a funding backstop for the city if voters don’t approve a sales tax.

Still, several council members planned to meet Tuesday to discuss whether they can put a sales-tax voter referendum on this November’s ballot.

Councilman John Crescimbeni proposed to explore whether the city could let voters decide this November to implement a half-cent infrastructure sales tax, which the city has the ability to levy with voter approval. Crescimbeni said he thinks it could be possible to use that tax to make the city’s existing debt payments, which could then free up about $68 million to pay towards the pension debt.

Assistant General Counsel Stephen Durden, who was asked to look into Council’s sales tax options, said on Monday he is still researching the issue and hasn’t determined if Council could do that. Durden said he will attend the Tuesday meeting on the sales tax and would be available to answer council members’ questions.

There are other possible ways to levy a sales tax to fund the pension debt.

One scenario, suggested by the pension reform task-force, called for the city to increase next year’s property tax rate and then utilize a state law that allows cities to use a sales tax for fire and rescue services that would replace the increased property tax the following year. Voters would have needed to approve that sales tax on a referendum in order to replace the property tax increase.

Councilman Bill Gulliford said the city could also lobby the state Legislature during next year’s session to let counties enact a sales tax dedicated solely for pension costs.

During the meeting, the council also maintained its criticism of Brown’s proposed budget plan to use $16.8 million in the city’s reserve savings for a variety of spending increases.

However, council members said they’d like to keep the budget’s spending similar to last year’s.

“I’m not a supporter for increasing our expenses this year,” said Councilman Ray Holt, adding that he opposed Brown’s plan to hire an additional 40 police officers.

TAPPING THE RESERVES

Council Auditor Kirk Sherman has said spending the $16.8 million in reserves — in addition to Brown’s plan to use the $13.4 million bankruptcy settlement from the Shipyards development and a projected $7.5 million surplus from the Sheriff’s Office — would bring the city’s reserves to an unhealthy level.

Sherman has also identified a potential $11 million shortfall in the city’s pension contribution and a roughly $4 million shortfall in tax projections, leaving some on the council to believe they’ll need to resolve roughly $55 million in expenses.

Councilman Bill Gulliford suggested simply stripping the reserve money out of the budget and forcing Brown to fill the hole.

“By doing so, we will let the mayor maintain his no-tax-increase posture by making us do all the hard work, but instead of us doing the cutting, allow the mayor to establish his priorities as he sees them,” Gulliford said.

“Some may think it was tongue in cheek,” Boyer said. “Let him solve the problems and figure out how he’ll make end’s meet.”

MAYOR’S BUDGET

In a written statement, Brown’s spokesman David DeCamp defended the mayor’s budget.

“We stand behind Mayor Brown’s proposed budget because it would make important investments toward reinvigorating downtown, supporting our parks and neighborhoods and strengthening public safety,” DeCamp said. “We will continue to work with council members as they review the budget.”

Later this week, the council will kick off the month-long process of molding the budget. The council’s Finance Committee on Thursday will hold its first budget hearing, where it dissects and possibly makes changes to each section of the budget.